hannans quarterly report 2012 | q3
DESCRIPTION
For period January to March 2012TRANSCRIPT
Hannans Reward Ltd | 3rd Quarter Activities Report 2011/2012
Fast Facts ASX Code: HNR
Capital Structure Shares on issue: 131.6m
Options on issue: 5m (ex 20c–$1)
Market cap: $10.5m (at 8c)
Board of Directors Chairman: Richard Scallan
Managing Director: Damian Hicks
Non-Executive Director: William Hicks
Non-Executive Director: Jonathan Murray
Projects Forrestania
Nickel & Gold
Lake Johnston Nickel & Gold
QVR Nickel
East Pilbara Gold & Base Metals
Dear Shareholders
During the 3rd Quarter Hannans:
§ announced a major corporate initiative being the proposed acquisition of a Scandinavian focussed minerals company;
§ completed reverse circulation (RC) drilling at Lake Johnston, geochemical sampling at Forrestania and field reconnaissance in the East Pilbara; and
§ completed an in-specie distribution of Errawarra Resources (owner of the Jigalong manganese project) to Hannans shareholders.
Our Exploration Team has always remained focussed on generating greenfields exploration targets and thereafter testing those targets with the aim of making an economic minerals discovery. The following financial statistics1 reflect that pursuit for greenfields exploration success:
Period Exploration & Evaluation Expenditure ($ million)
Exploration & Evaluation Expenditure Expressed as
a Percentage of Net Operating Cash Flows
3rd Quarter 2012/2012 1.489 82.9
Quarter Average for the period 1 July 2010 – 31 March 2012
(7 Quarters)
1.271 90.7
Average over all Quarters2 0.550 78.4
Total for the period 1 October 2003 – 31 March
2012 (34 Quarters)2
18.706 78.4
1 Figures extracted from Hannans Reward Ltd Appendix 5Bs 2 Includes all Quarters since listing on ASX on 5 December 2003
The Exploration Team has had success exploring for iron and manganese in the East Pilbara region of Western Australia and when combined with corporate action, this success has enabled Hannans to fund exploration campaigns without raising capital since 2009. In this case the risk taking was rewarded. We will also continue to focus our efforts on making a greenfields gold or nickel discovery that will provide Shareholders with a rapid share price increase. It is acknowledged however that greenfields exploration is high risk and that Hannans’ sustained exploration efforts without recent significant success, particularly during this period of global financial turmoil, has tested the resolve of Shareholders.
While Hannans maintains a strong balance sheet and tight capital structure the Board has decided to adjust the risk profile of its portfolio away from 100% pure greenfields exploration. In that regard, Hannans made an offer during the Quarter to acquire Scandinavian Resources Ltd, a company that has JORC compliant iron resources and a potential pathway to production in a low sovereign risk country. If this proposed acquisition is successfully completed, Hannans will have a risk adjusted platform from which to achieve its Goals.
Please consider this Quarterly Report in that context and if you have any questions you are most welcome to contact me.
Yours faithfully,
Damian Hicks
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 2
HANNANS REWARD, HIM AND CBS OVERVIEW
COMPLETION OF THE IN-SPECIE DISTRIBUTION On 27 June 2011, Hannans announced to ASX the proposed restructure of its assets through the sale of its subsidiary Errawarra Pty Ltd to Errawarra Resources Ltd in consideration for the issue of 131,648,715 Errawarra shares to Hannans (Restructure). On 31 January 2012, Hannans Shareholders voted in favour of the Restructure. After the Restructure was approved, Hannans completed the in-specie distribution of Errawarra shares to Hannans Shareholders. Subsections 125-80(2) and (3) of the Income Tax Assessment Act , 1997 requires Hannans shareholders to reasonably apportion the cost base of their shares between their newly acquired Errawarra shares and their existing shares in Hannans having regard to the market value of those shares just after the demerger. Following an assessment of Errawarra and Hannans immediately after the demerger it was determined that a reasonable apportionment of the shareholders’ existing cost base is:
Company Apportionment Percentage
Hannans Reward Ltd 96% Errawarra Resources Ltd 4%
100%
HANNANS PROPOSED ACQUISITION OF SCANDINAVIAN RESOURCES On the 29 February 2012, Hannans announced a proposal to acquire all of the outstanding fully paid ordinary shares in Scandinavian Resources Ltd (SCR) by way of an off-market takeover bid (Offer). On the 19 April 2012, SCR released their target statement (their response to the Offer) to ASX. The independent Directors of SCR unanimously recommended that, in the absence of a superior proposal that SCR shareholders should accept the Offer. Under the Offer, accepting SCR shareholders will receive three (3) Hannans shares for every one (1) SCR share held. The Offer opened on 3 April 2012 and will close on 18 May 2012, unless further extended or withdrawn. As at 27 April 2012, Hannans has received commitments to accept the Offer from four of the largest SCR Shareholders and at present 65 of the 333 SCR Shareholders have formally accepted the Offer. SCR Shareholder % Shareholding in SCR Equity and Royalty Investments (ERI) 1 29.7 Craton Capital Fund 1 9.1 Grängesberg Iron 6.1 Rio Tinto Mining and Exploration 2.8 Note
1. On 20 March 2012, ERI and Craton Capital Fund publicly disclosed their support for the bid subject to a superior proposal.
When combined with Hannans existing 17.27% shareholding in SCR and other SCR Shareholders who have accepted the Offer, Hannans relevant interest as at 27 April 2012 has increased to c.65.0%.
ATLAS IRON LTD SHAREHOLDING Hannans Investment Management sold 300,000 Atlas Iron Limited (ASX:AGO) shares to provide Hannans with working capital.
TRANSACTION SERVICES CBS continues to provide transaction services and financial management services to listed and unlisted companies and in doing so earns revenue that reduces Hannans fixed costs. The total fees earned since commencement of this business unit amount to $370,784.
APPOINTMENT Hannans has appointed Mr Ben Della-Vedova (Chartered Accountant) to the role of Business Development Manager. Prior to joining Hannans in early 2012 Ben had a combined 7 years’ experience with both PwC Australia in their Transaction Services and Valuation team and Deloitte in their Assurance and Advisory team. Ben has worked on a diverse range of publicly listed and private clients across a wide range of industries such as mining, oil and gas, financial services, manufacturing, agriculture, local government and corporate advisory. RESIGNATION Mr Don Huntly resigned as Exploration Manager during the Quarter. Hannans exploration activities are now being managed by Tom Lyons, Exploration Geologist and Helen Sanders, Administration Geologist together with a team of experienced external consultants.
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 3
EXPLORATION PROJECTS OVERVIEW By Tom Lyons, Exploration Geologist
Hannans is of the opinion that the following project portfolio has the potential to deliver an economic mineral deposit:
• FORRESTANIA (east of Hyden, Western Australia); Nickel, Gold and Iron
• QUEEN VICTORIA ROCKS (south-west of Coolgardie, Western Australia); Nickel and Gold
• LAKE JOHNSTON (west of Norseman, Western Australia); Nickel and Gold
• EAST PILBARA (south-east of Newman, Western Australia); Gold and Base Metals
Figure 1. Southern Yilgarn tenement location diagram
Figure 2. East Pilbara project showing tenement locations
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 4
SUMMARY AND HIGHLIGHTS Hannans has developed a strategically positioned package of greenfields exploration projects within corridors which are endowed with nickel sulphides, gold and base metals.
The Company’s objective is to realise value for the shareholders through exploration success within these projects by discovering an economic resource through the application of rigorous, methodical and multidisciplinary exploration processes.
Hannans will continue to look for opportunities to secure additional land holdings through incremental tenement applications or third party opportunities that can significantly add to the prospectivity of the current portfolio.
Exploration activities for the quarter have included RC Percussion drilling, diamond drilling, auger sampling, gravity surveys, surface TEM surveys and prospect mapping. Listed below is a summary of the exploration highlights:
LAKE JOHNSTON PROJECT
§ A 51 RC percussion hole drilling program targeting gold was completed this quarter at the Mt Gordon Prospect
§ Assays have been received for all of the holes and the best intervals are listed below:
MGRC013 – 1 metre @ 2.90 g/t Au (previously reported)
MGRC019 – 1 metre @ 3.62 g/t Au
MGRC020 – 2 metres @ 2.35 g/t Au (previously reported)
MGRC024 – 3 metres @ 1.40 g/t Au
MGRC036 – 6 metres @ 0.74g/t Au
MGRC045 – 1 metre @ 2.29g/t Au
MGRC046 – 2 metres @ 1.10g/t, 1 metre @ 2.17g/t and 1 metre @ 2.13g/t Au
MGRC047 – 2 metres @ 1.00g/t Au and 2 metres @ 4.24g/t Au
MGRC048 – 2 metres @ 1.01g/t Au
MGRC049 – 2 metres @ 5.75g/t Au and 1 metre @ 4.98g/t Au
MGRC050 – 2 metres @ 3.56g/t Au
MGRC056 – 2 metres @ 1.75g/t Au
§ A single RC percussion hole targeting nickel mineralisation has also been drilled at the Mt Gordon Prospect, assays have been received which have returned elevated nickel including:
MGRC059 – 48 metres @ 0.3% Ni (including 2 metres @ 0.52% Ni) from 16 metres and 2 metres @ 0.56% Ni from 96 metres
FORRESTANIA PROJECT
§ A new gold anomaly has been defined from auger sampling at Skeleton Rocks
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 5
FORRESTANIA PROJECT (1,152km2)
Hannans’ Forrestania project, comprising ground in joint venture and wholly owned tenements, is located within the multi-commodity Forrestania nickel, gold and iron greenstone belt. The project adjoins ground owned by mining companies Western Areas (ASX:WSA) and St Barbara (ASX:SBM). Over the past quarter exploration has been focused within the Skeleton Rocks prospect area in the form of geochemical sampling and field reconnaissance.
STORMBREAKER AND LUCY ROCKS PROSPECT AREA
No physical exploration was carried out within the Stormbreaker and Lucy Rocks Prospect areas. RC percussion drilling was initially planned to commence on Hematite iron targets at the Stormbreaker prospect during the quarter, however this drilling has now been postponed until the outcome of the proposed SCR takeover bid is known.
SKELETON ROCKS PROSPECT AREA
Exploration efforts at Skeleton Rocks have continued this quarter with geochemical sampling, field reconnaissance and data collation being conducted. Auger sampling was completed in the area during the quarter with the remaining 1581 samples collected from a total 2499 sample program which began in the previous quarter. Assay results have now been received for all the auger samples taken, the assays results show a new discrete gold anomaly on the south-eastern edge of the survey area (Figure 4). The anomaly has a strike extent of ~900 metres and is interpreted to be on a granite contact. Overall, two gold anomalies and a nickel anomaly were defined as a result of the auger sampling program (other anomalies were reported in the previous quarter). Further infill and step-out auger sampling is currently being planned in the area to further define and extend these anomalies to allow for drill targeting.
Figure 3. Skeleton Rocks geological summary and exploration targets
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 6
FORRESTANIA PROJECT (cont.)
Figure 4. Skeleton Rocks – Au in auger sampling assays and 1VD aeromagnetic image The following table includes a summary of the physical exploration completed within the Forrestania Project.
A CT I V I T Y
FO RRES TANIA SUMMARY
Geochemical Sampling 1,581 auger samples
Expenses for the Quarter* $184,081
*The amounts shown above are prepared on an Accruals Basis and are unaudited.
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 7
LAKE JOHNSTON PROJECT (375km2)
The tenements are located approximately 25km south-east of Russian mining giant Norilsk’s Maggie Hays and Emily Ann nickel sulphide mines (Figure 5).
High grade gold mineralisation has been identified in rock chip sampling at the Ernest Prospect, in RC percussion drilling at the Ernest, Hardcore and Charles Prospects and in RAB drilling at the Richard Prospect (Figure 5). Recent exploration activities for gold and nickel have been focused within the Mt Gordon prospect area where a +8,000 metre RC percussion drilling program has been completed. The following table includes a summary of the exploration activities completed during the quarter:
A CT I V I T Y
LAKE J O HN S TON S UMMARY
RC Percussion Drilling 21 holes for 3,534 metres
Expenses for the Quarter $633,734
*The amounts shown above are prepared on an Accruals Basis and are unaudited.
MT GORDON PROSPECT (GOLD)
A 52 hole RC percussion drilling program was recently completed at the Mt Gordon prospect (Figure 6). 21 holes for 3,534 metres were drilled during the quarter. The drilling was designed to test a number of discrete gold anomalies that cover a 2 km strike extent and a single nickel anomaly. Assays have been received for all 52 holes, significant gold intervals are included in Table 1, some of the best intervals include: § MGRC013 – 1 metre @ 2.90 g/t Au
§ MGRC019 – 1 metre @ 3.62g/t Au
§ MGRC020 – 2 metres @ 2.35 g/t Au
§ MGRC024 – 3 metres @ 1.40 g/t Au
§ MGRC036 – 6 metres @ 0.74g/t Au
§ MGRC045 – 1 metre @ 2.29g/t Au
§ MGRC046 – 2metres @ 1.10 g/t, 1 metre @ 2.17g/t and 1 metre @ 2.13g/t Au
§ MGRC047 – 2 metres @ 1.00g/t Au and 2 metres @ 4.24g/t Au
§ MGRC048 – 2 metres @ 1.01g/t Au
§ MGRC049 – 2 metres @ 5.75g/t Au and 1 metre @ 4.98g/t Au
§ MGRC050 – 2 metres @ 3.56g/t Au
§ MGRC056 – 2 metres @ 1.75g/t Au
The drilling dominantly intersected mafic (basalt) and granodiorite lithologies with minor quartz veining, pyrite mineralisation and silica alteration. The gold mineralisation appears to be associated with narrow, brittle quartz veining and weak to moderate silica alteration. A full review and interpretation of the results is now to be undertaken with the aim of better understanding the gold mineralisation in the prospect area and to determine whether the drilling has effectively explained the strong surface expression created from the geochemical sampling. NICKEL SULPHIDE EXPLORATION
During the recently completed drilling program, a single RC hole was also drilled into a nickel anomaly in the south eastern section of the Mt. Gordon prospect. Assays have been received for this hole, significant nickel intervals are included in Table 2, the best intervals include: § MGRC059 – 48 metres @ 0.3% Ni (including 2 metres @ 0.52% Ni) from 16 metres and 2 metres @ 0.56% Ni from 96 metres
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 8
The hole intersected ultramafic lithologies with intervals of elevated Mg content ranging from 0.13% to 23.7% Mg. RC chips from several sections of this hole have been sent to a lab for Petrographic and Mineragraphic investigation to help determine the exact mineral composition of the samples and determine if any significant nickel bearing sulphides are present.
Figure 5
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 9
Figure 6
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 10
Table 1: Mt Gordon Au RC drilling summary table
Hole ID MGA East
MGA North
Dip Azi. Total Depth
From (m)
To (m)
Int (m)
Au Grade (g/t)
MGRC013 289953 6402152 -60 090 156 122 123 1 2.91
MGRC014 289907 6402147 -60 090 156 133 134 1 0.70
MGRC018 289602 6403103 -60 090 168 82 83 1 1.12
116 117 1 0.83
130 132 2 0.89
MGRC019 289553 6403102 -60 090 150 89 90 1 3.62
102 103 1 0.58
129 130 1 1.04
MGRC020 289499 6403102 -60 090 156 0 2 2 0.81
26 28 2 2.35
MGRC024 289564 6403199 -60 090 150 126 129 3 1.40
MGRC027 289403 6403202 -60 090 156 43 44 1 1.43
132 134 2 0.53
MGRC033 289450 6403401 -60 090 114 102 103 1 1.73
MGRC035 289300 6403400 -60 090 120 94 95 1 1.06
MGRC036 290004 6404161 -60 090 120 62 68 6 0.74
MGRC043 289902 6404046 -60 090 174 140 141 1 0.72
163 164 1 1.84
MGRC045 290003 6403950 -60 090 174 99 100 1 0.90
127 128 1 1.27
157 158 1 2.29
MGRC046 289905 6403951 -60 090 168 80 82 2 1.10
101 102 1 2.17
113 114 1 0.52
130 131 1 0.80
138 139 1 2.13
MGRC047 289502 6403998 -60 090 156 12 14 2 0.75
62 64 2 1.00
78 80 2 4.24
MGRC048 289460 6404003 -60 090 174 90 92 2 1.01
167 168 1 1.28
MGRC049 289400 6404000 -60 090 173 113 114 1 1.24
129 130 1 0.97
136 138 2 5.75
143 144 1 0.53
159 160 1 4.98
MGRC050 290608 6403994 -60 090 192 62 64 2 3.56
MGRC052 290579 6404050 -60 090 174 146 148 2 0.62
MGRC056 289930 6402051 -60 090 122 112 114 2 1.75
*Lower cut-off grade of 0.5g/t Au
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 11
Table 2. Mt Gordon Nickel RC drilling summary table
Hole ID MGA East
MGA North
Dip Azi. Total Depth
From (m)
To (m)
Int (m)
Ni Grade (%)
MGRC059 290825 6400803 -60 090 174 16 64 48 0.30
96 98 2 0.56
118 134 16 0.26
140 168 28 0.28
*Lower cut-off grade of 0.25% Ni
QUEEN VICTORIA ROCKS – 542 KM2 The QVR Project has been owned 100% by Hannans since it listed on the ASX in 2003. The area south-west of Coolgardie has attracted significant interest from major nickel miner Mincor Resources. No physical exploration has been completed within the project during the quarter, however data compilation and review continues throughout the project area and rehabilitation of RC drill holes has been completed.
Activity QVR Summary
Expenses for the quarter* $72,190
*The amounts shown above are prepared on an Accruals Basis and are unaudited.
EAST PILBARA – 1,758 KM2 The East Pilbara project boasts the largest tenement holding out of all the projects in the Hannans portfolio, covering a corridor of ground considered prospective for base and precious metals. Hannans now holds the base metal and gold rights within the tenement package. During the quarter, Hannans successfully spun out the manganese and remaining iron rights from the project into a public unlisted company called Errawarra Resources Ltd. Exploration activities during the quarter included data review and field reconnaissance that targeted base metals and manganese mineralisation (carried out prior to the spin out of the manganese rights). Helicopter and 4WD supported surveys were conducted over new and existing base metals targets, including the Mundaroo zinc prospect, with some rock chip sampling conducted. Some of the assays results from the rock chips sampling came back anomalous in base metals with the best sample returning 423ppm Zn, 248ppm Pb and 0.82 ppm Ag. Further studies are required to evaluate their economic potential. The following table includes a summary of exploration activities completed on the East Pilbara project over the previous quarter.
Activity East Pilbara Summary
Geochemical Sampling 27 rock chip samples
Expenses for the quarter* $56,271
*The amounts shown above are prepared on an Accruals Basis and are unaudited.
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 12
SUMMARY OF EXPLORATION ACTIVITIES including ongoing exploration activities and schedule FORRESTANIA PROJECT (1,107 sq km’s granted, 709 sq km’s application) Schedule from Previous Qtr
Work Completed Current Qtr
Summary and Positive Results
Outstanding Activities from Previous Qtr
Schedule Coming Qtr
SKELETON ROCKS PROSPECT (Ni + Au + Fe)
Complete current auger sampling program. Implement additional infill and step-out auger sampling at Skeleton Rocks. Field check Azurite occurrence at Skeleton Rocks NW.
1581 auger samples completed. Minor reconnaissance work completed. Data compilation and review. Field checked Azurite occurrence at Skeleton Rocks NW, however a second visit is required.
A new gold anomaly has been defined from auger sampling A total of two gold anomalies and one nickel anomaly has been defined from auger program Extensive weathered BIF subcrop and outcrop noted in the area. Azurite (Cu hydroxyl-carbonate) noted in historical RAB samples from Skeleton Rocks NW, samples were not assayed for base metals.
Field check Ni and Au anomalies at Skeleton Rocks.
Field check Ni and Au anomalies at Skeleton Rocks. Implement additional infill and step-out auger sampling at Skeleton Rocks North. Second field check of Azurite occurrence at Skeleton Rocks NW. Field reconnaissance on Iron targets
STORMBREAKER PROSPECT (Ni + Fe)
Process and interpret auger sampling programs. Field reconnaissance at Stormbreaker North. RC percussion drilling to test hematite rich iron mineralisation during the coming quarter.
Nil. Nil. Process and interpret auger sampling programs. Field reconnaissance at Stormbreaker North. RC percussion drilling to test hematite rich iron mineralisation during the coming quarter
Process and interpret auger sampling programs. Field reconnaissance at Stormbreaker North.
LUCY ROCKS PROSPECT(Ni)
Nil. Nil. Nil. Nil. Nil.
EAST PILBARA PROJECT (1,758 sq km’s granted, 1,988 sq km’s application) Schedule from Previous Qtr
Work Completed Current Qtr
Summary and Positive Results
Outstanding Activities from Previous Qtr
Schedule Coming Qtr
MUNDAROO (Zn) AND PROJECT BASE METALS
Implement geochemical sampling programs. Plan surface geophysics trials over the Mundaroo Prospect.
Field reconnaissance and rock chip sampling Planned surface geophysics trials
Rock chip samples returned values up to 423ppm Zn, 248ppm Pb and 0.82ppm Ag.
Nil Data compilation and interpretation Undertake benchmarking study into base metals deposits/occurrences in the area
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 13
LAKE JOHNSTON PROJECT (399 sq km’s granted, 35sq km’s application) Schedule from Previous Qtr
Work Completed Current Qtr
Summary and Positive Results
Outstanding Activities from Previous Qtr
Schedule Coming Qtr
ERNEST PROSPECT(Au)
§ Rehabilitation of RC drilling collars and pads.
Rehabilitation of RC drilling collars and pads
Nil. Nil Nil
HARDCORE PROSPECT(Au)
§ Rehabilitation of RC drilling collars and pads.
Rehabilitation of RC drilling collars and pads
Nil. Nil Nil
MT GORDON PROSPECT(Au)
Complete RC drilling program.
52 holes completed, assays received for all holes.
High grade (up to 5.75g/t) gold intervals intersected in drilling. Elevated nickel (up to 0.56%) intervals intersected in drilling
Nil Review drilling program results and plan further work
MAGGIE HAYES SOUTHPROSPECT (Ni + Au)
Nil Nil. Nil. Nil Data compilation and interpretation. Field reconnaissance.
QUEEN VICTORIA ROCKS PROJECT (302 sq km’s granted, 253sq km’s application)
Schedule from Previous Qtr
Work Completed Current Qtr
Summary and Positive Results
Outstanding Activities from Previous Qtr
Schedule Coming Qtr
YARMANY PROSPECT (Ni)
Field reconnaissance. Plan geochemical sampling programs.
Data compilation and interpretation.
No historical exploration for Ni sulphides has been completed in the area.
Nil Nil
BENARI PROSPECT(Ni)
Rehabilitation of RC drilling collars and pads. Validate geology and magnetic high features.
Rehabilitation of RC drilling collars and pads. Validate geology and magnetic high features
Nil Nil Ongoing validation of geology and magnetic high features
HORSESHOE PROSPECT (Ni)
Nil. Nil. Nil. Nil. Nil.
SPARGOS NORTH & SOUTH (Ni)
Nil. Nil. Nil. Nil. Nil.
SPARGOS PROSPECT (Ni)
Re-logging of historical diamond drill core.
Nil. Nil. Nil. Nil.
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 14
CASH EXPENDITURE & SHARE PRICE (all quarters since ASX Listing)
EXPLORATION EXPENDITURE 2011/2012
1st Quarter
2nd Quarter
3rd Quarter
A$ % A$ % A$ % Geological activities 193,212 16.88% 258,915 13.30% 196,111 20.72%
Geochemical activities 109,855 9.60% 272,604 14.00% 179,390 18.96%
Geophysical activities 53,104 4.64% 32,854 1.69% 5,216 0.55%
Drilling 436,859 38.16% 925,183 47.52% 306,130 32.35%
Field Supplies 68,524 5.99% 215,843 11.09% 96,877 10.24%
Field camp and travel 77,593 6.78% 146,457 7.52% 63,982 6.76%
Environmental 21,189 1.85% 5,538 0.28% – –%
Rehabilitation – –% – –% 48,032 5.08%
Feasibility Studies – –% 1,620 0.08% 1,989 0.21%
Annual tenement rent 25,875 2.26% 45,047 2.31% 2,582 0.27%
Annual tenement rates 128,600 11.23% 3,291 0.17% 15,148 1.60%
Tenement administration 30,795 2.69% 9,322 0.48% 10,196 1.08%
Tenement application fees (770) (0.07)% 30,158 1.55% 20,624 2.18%
Penalty & exemption fees – –% – –% – –%
Total 1,144,837 100% 1,946,833 100% 946,275 100%
Cash Basis (Appendix 5B)
980,000 1,398,000 1,489,000
Timing Difference 164,837 548,833 (542,725)
The amounts shown above are prepared on an Accruals Basis and are unaudited.
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 15
HIM HANNANS INVESTMENT MANAGEMENT HIM operates by way of an Investments Committee comprising Damian Hicks, William Hicks and Jonathan Murray. HIM seeks to maximise returns through its equity portfolio, hybrid securities and debt. It also has a facility to borrow funds.
VALUATION OF EQUITIES as of 31 March 2012
COMPANY TYPE NUMBER PRICE ($) VALUE ($) NOTES
AGO FPO 4,000,000 2.88 11,520,000 1
SCR FPO 19,605,235 0.22 4,313,152
Other FPO 165,000 0.08 - 0.20 29,400
SCR Options (ex. 20c) 1,250,001 0.06 75,753 2
SCR Options (ex. 40c) 500,000 0.02 11,358 3
Total Equities 15,949,663
LOAN PORTFOLIO as of 31 March 2012
TO FACILITY ($) DRAWN DOWN ($) NOTES
Kiruna Iron AB 2,500,000 2,500,000 4
Scandinavian Resources Ltd 1,750,000 445,000 4
Kiruna Iron AB 750,000 750,000 4
Other 500,000 500,000
Total 5,500,000 4,195,000
Total Loan Interest-to-date 295,534
Notes 1 – Approximately 126,000 AGO shares were sold during April 2012 2 – Theoretical value calculated using BSOPM with 3.47% risk free rate, 87.6% volatility & 214 days to maturity as of 31 March 2012 3 – Theoretical value calculated using BSOPM with 3.47% risk free rate, 87.6% volatility &259 days to maturity as of 31 March 2012 4 – Assumes no conversion into SCR at 33c and 66c respectively (ie convertible loans) 5 – Refer Annual Financial Report for the Year Ended 30 June 2011
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 16
TRANSACTION SERVICES & CORPORATE MANAGEMENT Corporate Board Services is designed to assist the Boards and Management of ASX listed companies and those looking to list by assuming responsibility for the day-to-day compliance management of a Company and assisting companies through the IPO process. This value added service will enable the Board to focus on important strategic decisions.
STRATEGY CBS revenue reduces Hannans’ fixed cost
CBS offers Hannans shareholders opportunities to access new offerings (e.g. Scandinavian Resources Ltd, Naraccota Resources Ltd, Lithex Resources Ltd)
CBS utilises expertise of Hannans corporate team to provide transaction services and corporate management services to listed and unlisted private and public companies
SERVICES OFFERED FOR THE QUARTER Management of Initial Public Offering (IPO)
Financial Management § Budgeting and forecasting § Bookkeeping
§ Board remuneration, salaries and wages § Management reporting
ASX Compliance Management § Annual Report § Half-year Report
§ Quarterly Report § ASX & ASIC Documentations
Shareholder Communications Management
Company Secretarial & Administrative Support
CLIENTELE
Our clients include Scandinavian Resources Ltd (ASX: SCR), Equity & Royalty Resources Ltd, Naracoota Resources Ltd (ASX: NRR) and Swedish incorporated entities Scandinavian Resources AB and Kiruna Iron AB as well as the Hannans Reward Group of companies.
The range of services provided this year include assisting with the IPO and listing on the ASX of Narracoota Resources Ltd, preparation of Annual, Half Year and Quarterly Reports, preparation of loan documents, preparation of detailed board packs for board meetings, arranging shareholder meetings, preparation of Notices of Meeting and providing full accounting and financial management support to our Australian and Swedish based clients.
Our clients’ benefits by engaging with experienced and professional services customised to their individual needs which provides ease of mind that unnecessary missed dates or delays in the company’s obligations. This enables clients to focus on the core business activities of their company rather than day-to-day management, providing better utilisation of management’s time.
FEES INVOICED
Period $
January – March 2011 44,932
April – June 2011 125,503
July – September 2011 101,887
October – December 2011 73,579
January – March 2012 24,883
Total 370,784
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 17
HANNANS Capital
HANNANS REWARD LTD CAPITAL STRUCTURE as of 31 March 2012
TYPE NUMBER EXPIRY FPO 131,648,715 Options (ex. 80c) 1,000,000 30-Jun-12 Options (ex. 40c) 100,000 30-Jun-12 Options (ex. 80c) 1,000,000 30-Jun-13 Options (ex. 20c) 2,000,000 30-Jun-13
SHAREHOLDERS OF HANNANS As at 31 March 2012, there were 1,716 shareholders and the Top 20 Shareholders of Hannans were:- Rank Name Shares %
1 JP Morgan Nominees Australia Limited <Cash Income A/C> 11,120,733 8.45 2 Marfield Pty Limited 8,724,543 6.63 3 Aust Global Resources Pty Ltd 3,636,363 2.76 4 Acacia Investments Pty Ltd 3,554,697 2.70 5 Eric Preston Pty Ltd 3,020,000 2.29 6 HSBC Custody Nominees (Australia) Limited 2,633,200 2.00 7 Mossisberg Pty Ltd 2,296,296 1.74 8 Dixon International Pty Ltd 2,075,720 1.58 9 Navigator Australia Ltd <Mlc Investment Sett A/C> 1,608,989 1.22 10 Kanaslex Pty Limited 1,548,296 1.18 11 Ms Susan Eileen Dechow 1,500,001 1.14
12 Bonord Pty Ltd <C W Hulls & Co Super Fund> 1,500,000 1.14
13 Mr Terrence Ronald Grammer 1,500,000 1.14 14 Susern Holdings Pty Ltd 1,500,000 1.14 15 Mandies Meats Pty Ltd <Number 2 Account> 1,497,000 1.14 16 Mr Alan Paul Rudd 1,400,000 1.06 17 Jigalong Community Inc/C 1,306,500 0.99 18 Mr Terrence Ronald Grammer 1,290,000 0.98 19 Mr David Milorad Novac + Ms Cathy Lee Sheehan
<Shevac Super Fund A/C> 1,206,346 0.92
20 Nijinsky Corporation Pty Ltd <Nijinsky Retire Fund A/C> 1,200,600 0.91 Totals: Top 20 holders of ORDINARY SHARES (GROUPED) 54,119,284 41.11 Total Remaining Holders Balance 77,529,431 58.89
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 18
RECENT PERFORMANCE OF HANNANS SHARES
SUMMARY AND HIGHLIGHTS Hannans was incorporated on 11 March 2002 as a mineral exploration company focussed on greenfields gold and base metal exploration in Western Australia. Hannans was admitted to the Official List of ASX in December 2003. Since its incorporation, Hannans has explored several gold, nickel, iron and manganese deposits. Hannans recently announced it planned to acquire 100% of Scandinavian focussed minerals company Scandinavian Resources Ltd, owner of the Kiruna Iron Project in Sweden.
Hannans’ business activities are divided into three separate units:
§ Hannans Reward (Exploration);
§ Hannans Investment Management (Equities, Hybrid Securities and Debt); and
§ Corporate Board Services (Transaction Services and Corporate Management).
Hannans has developed a suite of prospective exploration projects within Australia covering the following:
§ Forrestania – a nickel and gold project 7km north of Western Area NL’s Flying Fox nickel mine, a portion of the Stormbreaker Prospect includes a joint venture with Cullen Resources Ltd (Cullen) (Hannans – 80%, Cullen – 20% free carry).
§ Lake Johnston – a nickel and gold project located 25km south east of Norilsk’s Maggie Hays nickel mine and 100kms west of Norseman.
§ Queen Victoria Rocks – a nickel and gold project located 30km south-west of Coolgardie, WA.
§ East Pilbara – base metal exploration.
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
03 Jan 12 17 Jan 12 31 Jan 12 14 Feb 12 28 Feb 12 13 Mar 12 27 Mar 12Sh
are
Pric
e (A
UD
/Sha
re)
Vol
ume
(k)
Share Price Performance
Volume Share Price
0
50
100
150
200
250
300
350
400
450
02 Jan12
11 Jan12
20 Jan12
31 Jan12
09 Feb12
20 Feb12
29 Feb12
09 Mar12
20 Mar12
29 Mar12
Vol
ume
(k)
Trading Volume
Volume Average
-200.0 -150.0 -100.0 -50.0 0.0 50.0 100.0 150.0
Euroz Securities Ltd
RBS Morgans Limited
Bell Potter Securities Ltd
Macquarie Equities Ltd
ETRADE Australia Securities Ltd
Australian Investment Exchange Ltd
Patersons Securities Limited
Morgan Stanley Smith Barney Australia Pty Ltd
Nomura Australia Limited
Commonwealth Securities Ltd
Broker Activity
Sell ($k) Buy ($k)
HANNANS 3 r d QUARTER ACTIVITIES REPORT: MARCH 2012 19
CONTACTS For further information please contact: Mr Damian Hicks Managing Director Ben Della-Vedova Business Development Director Tel: +61 8 9324 3388 Web: www.hannansreward.com Email: [email protected]
Tom Lyons Exploration Geologist
Competent Persons Statement The information in this document that relates to exploration results is based on information compiled by Mr Donald Huntly, who is a Full Member of the Australian Institute of Geoscientists and a Registered Professional Geoscientist. Mr Huntly is a consultant to Hannans Reward Ltd. Mr Huntly has sufficient experience, which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined by the 2004 edition of the “Australian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Huntly consents to the inclusion in the report of the matters based on the information in the form and context in which it appears